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Income Tax Appellate Tribunal, JAIPUR BENCHES ‘A’ JAIPUR
Before: SHRI VIJAY PAL RAO, JM & SHRI VIKRAM SINGH YADAV, AM vk;dj vihy la-@ITA No.296/JP/2018
आयकर अपीलीय अधिकरण] जयपुर न्यायपीठ] जयपुर IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES ‘A’ JAIPUR Jh fot; iky jko] U;kf;d lnL; ,oa Jh foØe flag ;kno] ys[kk lnL; ds le{k BEFORE: SHRI VIJAY PAL RAO, JM & SHRI VIKRAM SINGH YADAV, AM vk;dj vihy la-@ITA No.296/JP/2018 fu/kZkj.k o"kZ@Assessment Year : 2013-14 cuke Shri Kamal Tak, Income Tax Officer, Vs. 295 Gujrati Bhatta, Ward-1(3), Topdara, Ajmer Ajmer. LFkk;h ys[kk la-@thvkbZvkj la-@PAN/GIR No.: AMWPT3092M vihykFkhZ@Appellant izR;FkhZ@Respondent fu/kZkfjrh dh vksj ls@ Assessee by : Sh. Subhash Porwal (CA) jktLo dh vksj ls@ Revenue by : Miss Chanchal Meena (Addl. CIT) lquokbZ dh rkjh[k@ Date of Hearing : 07/07/2020 mn?kks"k.kk dh rkjh[k@Date of Pronouncement: 10/07/2020 vkns'k@ ORDER
PER: VIKRAM SINGH YADAV, A.M.
This is an appeal filed by the assessee against the order of ld. CIT(A), Ajmer dated 10.01.2018 for Assessment Year 2013-14 wherein the assessee has challenged the non-grant of TCS credit of Rs. 2,28,713/- in the proceedings u/s 154 of the Act.
At the outset, it is noted that the matter was earlier heard and disposed off vide order dated 04/09/2018 and subsequently, in response to assessee’s misc application, the order was recalled vide order dated 23/04/2019 and the relevant findings read as under:
“6. We have heard the rival contentions and perused the material available on record. It is a matter of record that the assessee has filed a copy of agreement dated 20.07.2011 which is available on record and
ITA No. 296/JP/2018 Shri Kamal Tak, Ajmer Vs ITO, Ajmer
therein, both the parties had agreed that the responsibility to file tax return in respect of transactions relating to the liquor shop shall be on the assessee, and TCS shall be claimed by the assessee and not by Shri Bhairu Singh. Further, we find that the ld. CIT(A) has returned a finding that the TCS actually been deducted of Rs. 2,28,714/- in the name of Shri Bheru Singh Tax ( PAN No. AOBPT6127). It is therefore a matter of record that there is an written understanding between the main licensee and the assessee that the latter shall disclose the business transactions relating to liquor shop and shall pay taxes and any tax collected at source shall be claimed by the assessee and apparently, the same has skipped the attention of the Bench while passing the impugned order. We therefore, deem it appropriate to recall the impugned order and the Registry is directed to fix the matter for hearing the same afresh on merits in due course. The matter has accordingly been listed for fresh hearing and has come up for fresh adjudication today.
Briefly stated, the facts of the case are that the assessee filed an application u/s 154 against the intimation issued u/s 143(1) by the CPC stating that the credit of TDS of Rs. 2,28,714/- was not granted to the assessee. The AO did not allow the claim of the assessee holding that the TCS was deducted in the name of main licensee (Shri Bheru Singh Tak) with different PAN and no credit of TCS has been shown in Form No. 26AS of the assessee. Therefore, applying the provisions of Rule 37BA, the rectification application so filed by the assessee was dismissed.
On appeal, the ld. CIT(A) held that it is an undisputed fact that the tax of Rs. 2,28,714/- was collected at source in the name of Shri Bheru Singh Tak and the deductee has not fulfilled the condition laid down under Rule 37BA(2) and it was accordingly held by the ld. CIT(A) that there is no mistake apparent from the record in the intimation issued u/s 143(1) as the 2
ITA No. 296/JP/2018 Shri Kamal Tak, Ajmer Vs ITO, Ajmer
credit of TCS has not been allowed to the assessee as he was neither a deductee nor the condition laid down under rule 37BA(2) are fulfilled. Accordingly, he upheld the order passed by the AO rejecting the application of assessee u/s 154 of the Act. Against the said findings, the assessee is in appeal before us.
During the course of hearing, the ld AR submitted that the assessee had entered into an agreement dated 20.07.2011 with Bhairu Singh wherein he has declared that the filing of tax return is the responsibility of the assessee and he has also agreed that he will not claim any TCS in his personal tax return. It was submitted that the assessee has no access to his personal tax return but it is a fact that he has not claimed any credit of TCS in his tax return and which can be verified by the Tax Department. It was accordingly submitted that where complete purchase and sale of main licensee have been considered in case of sub-licensee, the credit for TCS should also be granted to the sub-licensee which in the present case is the assessee subject to the condition that no claim of such TCS have been made by the main licensee in his individual return of income. It was further submitted that in similar cases, the Coordinate Benches have passed the orders wherein the matter has been set aside to the file of the Assessing Officer for necessary verification of TCS by the main licencee and reliance has been placed on the following decisions: • Dinesh Tak, Beawar vs ACIT, CPC (ITA No. 815/JP/2015 dated 19.04.2017) • M/s Jai Ambey Wines vs ACIT, CPC (ITA No. 676/JP/2015 dated 11.01.2017)
Per contra, the ld. DR referred to the return filed by the assessee and submitted that in the return of income, the assessee has only claimed TCS of Rs. 1,84,650/- as against Rs. 2,28,714/- which has now been claimed in 3
ITA No. 296/JP/2018 Shri Kamal Tak, Ajmer Vs ITO, Ajmer
the rectification application and in the grounds of appeal so raised before the Bench. The ld. DR further referred to Rule 37BA(2) and submitted that the assessee has not fulfilled the conditions so laid down under the said rule. It was further submitted that regarding the decisions which have been relied upon by the assessee in its written submission, those decisions are distinguishable on facts as in those cases, necessary declarations have been filed by the main licensee that they have not claimed the TCS from the department and it was accordingly submitted that the said decisions cannot be applied in the case of the assessee as no details have been furnished regarding the main licensee as to whether he has claimed any credit for the TCS in the return of income or not and further the specific requirements of Rule 37BA(2) of the Act have not been fulfilled. The ld DR accordingly supported the order of the lower authorities.
We have heard the rival contentions and perused the material available on record. Firstly, in the proceedings u/s 154 of the Act, there has to be a mistake apparent from record which shows that the assessee was eligible for TCS but was not granted the credit thereof. In the instant case, we find that in the return of income, though the assessee has claimed TCS, however, in absence of reflection of the TCS in the name of the assessee in Form No. 26AS, while processing the return of income, the credit of TCS has not been granted to the assessee. Thereafter, during the rectification proceedings, the assessee has submitted before the Assessing officer that though TCS has been collected in the name of Shri Bheru Singh Tak, the corresponding revenues have been offered by the assessee in his return of income. The Assessing officer has not disputed the said fact that revenues have been offered by the assessee in his return of income but at the same time, has rejected the said claim stating that TCS was deducted in the name of Shri Bheru Singh Tak having different PAN and therefore, the credit of the same cannot be allowed to the assessee. It is a settled legal 4
ITA No. 296/JP/2018 Shri Kamal Tak, Ajmer Vs ITO, Ajmer
proposition that the TCS is a form of advance payment on behalf of the assessee and where the assessee has offered the income in particular assessment year and the income has been brought to tax in the hands of the assessee, the corresponding TCS should be allowed to the assessee. Therefore, in the instant case, where there is no dispute that the income has been offered by the assessee and brought to tax, the assessee should be eligible for corresponding TCS subject to the fact that the same has not been claimed by Shri Bheru Singh Tak. Similar findings have been recorded by the Coordinate Bench in case of M/s Jay AMBEY Wines (supra) which read as under:-
“2.7 The essence of the above stated provisions and corresponding rules is that the tax deducted at source (TDS) is nothing but tax, and credit for TDS should go to the person in whose hands the income is rightfully and finally assessed to tax in accordance with law irrespective of the person in whose hands the TDS has been deducted and TDS certificate has been issued at first place. If we look at the provisions of section 206C read with section 190 of the Act, the nature of tax collection at source (TCS) is exactly identical to TDS and it is in the nature of tax on income which has been collected at source in respect of specified business and the nature of goods as specified in section 206C of the Act. In light of above, the credit for TCS should be given to the assessee which is finally and lawfully assessed to tax in respect of the corresponding income on which TCS has been collected. The fact that there are no specific rules which have been provided in the income tax Rules in respect of credit of TCS in such situations on the lines of Rule 37BA, in our view, doesn’t disentitle the assessee to claim credit of TCS in whose hands the income is finally assessed to tax. The reason for the same is that the nature of TCS is nothing but tax which has been statutorily recognized in the Income tax Act, and the Rules are enabling and procedural in nature and absence thereof cannot result in denial of credit of 5
ITA No. 296/JP/2018 Shri Kamal Tak, Ajmer Vs ITO, Ajmer
TCS. This issue also find supports from the decision of the Coordinate Bench in case of ACIT, Circle-02, Udaipur vs. Shri Krishnalal Meel & party (supra). ”
We accordingly agree with the contention of the ld AR that where complete purchase and sale of main licensee have been considered in case of sub-licensee, i.e the assessee, the credit for TCS should also be granted to the assessee subject to the condition that no claim of such TCS have been made by the main licensee in his individual return of income. In support of his contention, the assessee has submitted an agreement dated 20.07.2011 with Shri Bhairu Singh (PAN AOBPT6127) wherein the latter has declared that the filing of tax return is the responsibility of the assessee and he has also agreed that he will not claim any TCS in his personal tax return. It was submitted by the ld AR that the assessee has no access to Shri Bhairu Singh’s personal tax return but it is a fact that he has not claimed any credit of TCS in his tax return and which can be verified by the Tax Department as PAN NO. AOBPT6127 of Shri Bhairu Singh is on record and available with the Assessing officer. The matter is accordingly set-aside to the file of the Assessing officer to verify whether TCS has been claimed by Shri Bheru Singh Tak and whether on verification, it is found that TCS has not been claimed by Shri Bheru Singh Tak, allow the TCS corresponding to income declared by the assessee in his return of income for the impugned assessment year.
In the result appeal so filed by the assessee is disposed off with aforesaid directions.
ITA No. 296/JP/2018 Shri Kamal Tak, Ajmer Vs ITO, Ajmer
Order pronounced in the open Court on 10/07/2020. Sd/- Sd/- ¼fot; iky jko½ ¼foØe flag ;kno½ (Vijay Pal Rao) (Vikram Singh Yadav) U;kf;d lnL;@Judicial Member ys[kk lnL;@Accountant Member Jaipur Dated:- 10/07/2020 *Ganesh Kr आदेश की प्रतिलिपि अग्रेषित@ब्वचल वf जीम वतकमत वितूंतकमक जवरू vihykFkhZ@The Appellant- Shri Kamal Tak, Ajmer 1. izR;FkhZ@The Respondent- ITO, Ward-1(3), Ajmer 2. vk;dj vk;qDr@CIT 3. vk;dj vk;qDr¼vihy½@The CIT(A) 4. विभागीय प्रतिनिधि] आयकर अपीलीय अधिकरण] जयपुर@क्त्ए प्ज्Aज्ए Jंपचनत 5. xkMZ QkbZy@Guard File (ITA No. 296/JP/2018) 6.
vkns'kkuqlkj@ By order, सहायक पंजीकार@ Aेेपेजंदज त्महपेजतंत